Macroeconomics

Factor of production:

An input used to produce

goods and services; for example, capital or labor.

Factor price:

The amount paid for one unit of a

factor of production.

Factor share:

The proportion of total income

being paid to a factor of production.

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Federal funds rate:

The overnight interest rate at

which banks lend to one another.

Federal Reserve (the Fed):

The central bank of

the United States.

Fiat money:

Money that is not intrinsically useful

and is valued only because it is used as money. (Cf.

commodity money, money.)

Financial intermediation:

The process by which

resources are allocated from those individuals who

wish to save some of their income for future con-

sumption to those individuals and firms who wish 

to borrow to buy investment goods for future

production.